2006 (7) TMI 113 - HC - Income Tax

Public sector undertaking (assessee has not obtained clearance form High Power Committee such committees are set up for the purpose that frivolous disputes not come before HC without clearance from committee so appeal is dismissed assessee at liberty to revive the appeals

Summary

Issues:
Appeal against Income-tax Appellate Tribunal's order for assessment years 1997-98, 1979-80, 1983-84, and 1985-86. Questions on the dismissal of appeals without considering tax provisions and calculating Minimum Alternate Tax (MAT) provisions. Requirement of obtaining clearance from High Powered Committee to prevent frivolous litigations between Government Departments and public sector undertakings.

Analysis:
The High Court of Madras heard tax case appeals against the Income-tax Appellate Tribunal's order for various assessment years. The appellant, a public sector undertaking, raised questions on the dismissal of appeals without considering specific tax provisions and the calculation of MAT provisions. The court highlighted the necessity of obtaining clearance from the High Powered Committee to prevent frivolous litigations between Government Departments and public sector undertakings. It referenced previous judgments emphasizing the importance of resolving disputes internally to avoid unnecessary court involvement.

The court cited the Oil and Natural Gas Commission case, Canara Bank v. National Thermal Power Corporation, and Chief Conservator of Forests case to underscore the need for conciliation and avoiding litigation between Government Departments and public sector undertakings. It emphasized that such disputes should be resolved internally through committees to prevent wastage of public money and time. The court reiterated the importance of coordination among government entities to maintain public interest and avoid unnecessary confrontation in legal matters.

Referring to the Mahanagar Telephone Nigam Ltd. case, the court reiterated the burden on courts due to numerous cases involving government departments and public sector undertakings. It stressed the role of the High Powered Committee in preventing frivolous disputes from reaching the courts and highlighted the need for disciplined adherence to the committee's decisions. The court dismissed the appeals in the instant case due to the appellant's failure to obtain clearance from the High Powered Committee, with the option to revive the appeals if advised to do so.

In conclusion, the judgment underscored the importance of internal dispute resolution mechanisms to prevent unnecessary litigation between government entities and public sector undertakings. It highlighted the need for coordination, discipline, and adherence to committee decisions to maintain public interest and avoid wastage of resources in legal matters.